Nokia will pay â‚¬263 million (US$410 million) for the remaining shares in UK-based smartphone software maker Symbian and make its software royalty-free to boost phone sales and respond to new rivals such as Google, a Reuters report said.
The Reuters report also quoted Nokia saying that it would contribute Symbian's assets to a not-for-profit organization in which it would unite with leading handset makers, operators and chipmakers to create an open-source platform with wide appeal.
Symbian's software is used in two-thirds of smartphones but new platforms such as Google's Android and Apple's iPhone could challenge its dominance.
'It indicates that Nokia is worried by the rise of lower-cost operating systems from Google Android and LiMo Foundation,' analyst Neil Mawston from Strategy Analytics, was quoted by the report, as saying, referring to two rival open-source systems.
'But it is also a sign that Nokia has a formidable pricing weapon at its disposal to fend off competitors and maintain its number one global position in smartphones.'
Currently, Symbian's closest rival is Microsoft's Windows Mobile operating system, which has just 13% of the market despite the US software maker's efforts to gain market share.
Widely supported software platforms such as Google's Android can enable handset makers to cut development time, attract the developer community to work on attractive programs, and allow mobile operators to cut costs.
Microsoft said Nokia's move was likely to confuse operators and handset makers with unwanted extra choices and said it would not change its own strategy as a result.